Business: President of Turkey Recep Tayyip Erdogan has established his interest in securing a stronger grip over Russia’s gas transit flows to Europe.
Speaking to the Parliament of Turkey on Wednesday last month, Erdogan announced that he had agreed to join the forces with Moscow’s President Vladimir Putin to build a natural gas hub in Turkey in order to supply gas to Europe.
Russia is Shipping gas to Turkey across the Black Sea via the Blue Stream and Turk Stream pipelines, with Russian gas giant Gazprom understood to be aiming to increase its Turk Stream throughput capacity by a further thirty-one point five (31.5) billion cubic per meter.
The idea to transform Turkey into a regional gas hub for Russian exports to Europe was keenly announced last week during a conference in Moscow to the visible surprise of Turkish Energy Minister Fatih Donmez, who attended the event.
Giving a strategic plan, Recep Erdogan ordered the Turkish Ministry of Energy to start working on the proposals with immediate effect, according to Russia’s news outlets.
However, Turkish and Russian government officials have yet to come up with a solid announcement of a time frame for the completion of the Turk Stream expansion, and potential arrangements for Turkey to help Gazprom in building the deep-water pipeline segments.
The expansion process will typically include a pipe-laying job being carried out in water depths of more than two thousand (2000) meters, and Gazprom is not expected to be able to secure pipe-lay contracts with Western specialized contractors, due to international sanctions imposed on Russia following its invasion of Ukraine in February this year.
A partner with Russian-based energy consultancy RusEnergy, Mikhail Krutikhin, stated that it is at an early stage to predict whether the project will clinch to the next economic level after feasibility studies are completed.
Mikhail Krutikhin believes that Erdogan may use Russia’s hub proposal to help gain a lower price for Russian gas as part of his efforts to improve his Turkish economy ahead of the presidential elections dated in June 2023.
Turkey witnessed an increase of at least eighty-three (83) percent in consumer prices between January and September this year, according to CNBC, and the Turkish lira has dropped to a new record lower against the US dollar, after losing twenty-eight (28) percent of its value this year.
Figuring out earlier in October, Bloomberg reported that Turkish state gas importer, Botas, asked Gazprom to arrange some of the payments for gas to 2024 to help mitigate the effect of high energy prices on the country’s economy.
Moscow’s volumes have increased to cover an estimated forty-five (45) percent of Turkey’s gas consumption since the beginning of the Turk Stream pipeline at the end of 2019.
The idea of Russian gas supplies via Turk Stream came under scrutiny this summer after the Dutch authorities revoked the backbone maintenance and construction license for the pipeline’s Netherlands-registered operator South Stream Transport, due to the International Sanctions against Russia.
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On the other hand, European authorities have considered expanding the Southern Gas Corridor’s capacity, with plans to at least double the imports of Azeri gas to twenty (20) Bcm per annum by the year 2027 as a medium-term option to help secure alternatives to Russian gas supplies.
